How to Weather the Economic Storm: A Q&A with Eric Kampmann, president of Midpoint Trade Books and Beaufort Books
The current financial crisis has left no industry untouched, including the book publishing industry. According to Eric Kampmann, president and co-founder, Midpoint Trade Books, and president, Beaufort Books, now is the time for publishers to make strategic decisions to place their companies on secure financial footing.
“In my entire publishing career (39 years), I have never seen an economic situation like the one that has hit every level of the publishing industry during the past five months,” he says.
Here, Kampmann offers Book Business Extra readers his insights on steps publishers should be taking now. He also will present a related session, "Strategies to Deal With a Contracting Marketplace and Weather the Financial Storm," at the Publishing Business Conference & Expo in New York City in March.
Book Business Extra: What are some key steps that publishers need to take now to deal with the current recession?
Eric Kampmann: … Stop all unnecessary expenditures immediately. Reduce debt to zero, if possible, but definitely reduce it. Assume the economy is not going to shift back into drive anytime soon, and review every aspect of your company so that you are operating at 100-percent efficiency. It is time to be hard-headed, and the choices you make over the next several months will probably determine how well you will be positioned when the economy begins to recover. Remember, every company faces hard times ahead. Both large and small publishers, distributors and booksellers must make provisions for this crisis. … Lean and mean is the name of the game.
Assume the worst, and then you won’t underestimate the dangers lurking out there. If I were running a large publishing house, I would start with royalty advances and royalty rates. I know this is politically incorrect, but now is the perfect time to remedy a problem that reaches way back into the 20th century. Why are royalties, for example, paid on a fictitious retail price? Are publishers really locked into six- and seven-figure advances? I would also go to all department heads and try to get them to make recommendations for new models of operational efficiency. Harness your assets. There are few companies that do not have managers who have not dreamed of a better way. Find out what they are thinking and put the best ideas to work—now.